Assembly Advances Internet Betting Bill

TRENTON – A package of bills aimed at helping New Jersey’s casino and horse racing industries were advanced Thursday by an Assembly panel.

The bills would:

Enable New Jersey residents to place wagers on Atlantic City casino games via the Internet. (A-2570). Approved by a vote of 7-0-4.

Establish a special dedicated fund in the Department of Law and Public Safety to provide enhanced incentives for the breeding and development of racehorses in the state. (A-3531). Approved by a vote of 8-0-3.

Establish the Atlantic City Tourism District, broaden the powers and duties of Casino Reinvestment Development Authority and transfer the Atlantic City Convention and Visitors Authority and its functions to the CRDA (A-3581). Approved by a vote of 11-0.

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The Internet wagering bill, the Assembly counterpart of legislation sponsored by state Sen. Ray Lesniak (D-Elizabeth), would allow all games, including poker, that are played at a casino to be offered through Internet wagering.

Lesniak says that Internet wagering on casino games could generate $210-250 million in gross revenues, but Moody’s Investors Service issued a report projecting that the initiative would not expand revenue for the casino industry.

“We do not believe Internet gambling and sports betting will grow the overall market because consumers will continue to feel pressure from economic forces such as high unemployment for some time,” the report said. “We expect revenue would go in one pocket and out the other as gaming companies use different forms of gambling to vie for the same customer base.”

Under the bill, all equipment used by a licensee to conduct Internet wagering, including but not limited to computers, servers, monitoring rooms and hubs, must be located either in a restricted area on the premises of the casino hotel or in a secure facility inaccessible to the public but within the territorial limits of Atlantic City.

All Internet wagers would be deemed to be placed when received in Atlantic City by the licensee regardless of the player’s physical location within this state. Any intermediate routing of electronic data in connection with a wager would not affect the fact that the wager is placed in Atlantic City.

The bill would impose an annual tax on Internet wagering gross revenues in the amount of 8 percent of such gross revenues which will be paid into the casino revenue fund, with the Casino Reinvestment Development Authority annually appropriating a percentage of the amount of that tax generated to the New Jersey Racing Commission to be used for the benefit of the horse racing, including but not limited to the augmentation of purses.

The other bill would establish a special dedicated fund in the Department of Law and Public Safety from which awards may be made to provide enhanced incentives for the breeding and development of racehorses in this state.

“A strong horse racing industry will follow a strong breeding program,” Assemblyman John Burzichelli (D-Gloucester) said. “New Jersey is already one of the leading horse breeding states in the nation, but a fund like this will only help ensure a stronger industry moving forward. That will create jobs and economic growth that will benefit everyone.”

Specifically, the bill provides for the establishment of a special non-lapsing fund to be known as the New Jersey Standardbred and Thoroughbred Racehorse Incentive Fund within the Department of Law and Public Safety. Under the bill, the fund is required to be maintained and administered by the New Jersey Racing Commission, and any monies deposited into the fund, together with any interest, are required to be awarded, beginning on or before April 1, 2012 and on or before that date each year thereafter, by the commission to provide enhanced incentives for the breeding and development of thoroughbred and standardbred racehorses in this state.

The final bill (A-3581) would establish the Atlantic City Tourism District, broaden the powers and duties of Casino Reinvestment Development Authority and transfer the Atlantic City Convention and Visitors Authority and its functions to the CRDA.

“This is an effort to try something new to ensure a friendly, clean and safe casino district that will feature smart redevelopment and in and of itself promote Atlantic City and its offerings,” said Caputo (D-Essex), who is also sponsoring legislation (AJR-65) to explore bringing gaming to Bergen County.

The tourism district would be an area in which the CRDA would have authority to impose land use regulations, implement a tourism district master plan promoting cleanliness, commercial development and safety, undertake redevelopment projects and institute public safety infrastructure improvements.

The tourism district would encompass the casinos, casino hotels, the area encompassing the Atlantic City Special Improvement District, any property under the ownership or control of the CRDA, any property under the ownership or control of the Atlantic City Convention and Visitors Authority, property within Atlantic City that is under the ownership or control of the New Jersey Sports and Exposition Authority prior to the transfer of the ACCVA to the CRDA, any part of the property consisting of the Atlantic City convention center project, including the Atlantic City Convention Center and Boardwalk Hall, and any specified parts of Atlantic City which the CRDA finds by resolution to be an area in which the majority of entities are engaged primarily in the tourism trade.

Under the bill, the CRDA is given extensive powers to redevelop and manage the tourism district.